Montgomery Ward & Co. Inc.'s approximately $1 billion pension plan and $385 million 401(k) retirement plan will not be affected by the Schaumburg, Ill.-based retailer's bankruptcy filing last week, said Patrick J. Casey, vice president and treasurer of Signature Group. That group is a wholly owned financial services subsidiary, which oversees the pension fund.
The company's pension plan - which is managed almost entirely by outside money managers - has been overfunded for years, and the retailer does not anticipate making any contribution for a long time, Mr. Casey said.
Meanwhile, a PBGC spokeswoman said the federal pension insurance agency has no plans of taking over the pension plan because the company has not shut it down.
``Montgomery Ward's defined benefit pension plan is continuing and is insured by the PBGC,'' the PBGC said in a statement. ``We have no indication that there are any serious problems with the pension plan.''
Los Angeles County Employees' Retirement Association, Pasadena, decided to allocate as much as $200 million over the next year to an existing emerging markets stock portfolio and will study emerging markets debt later this year.
The $200 million will go to the Capital Guardian Trust Emerging Markets Growth Fund. LACERA has $424 million with the fund now. The decision was made because the county wanted to increase its allocation to emerging markets equity slightly.
The $22 billion pension fund so far has no plans to invest in emerging markets debt.
Contra Costa County Employees' Retirement Association, Concord, Calif., placed Scudder, Stevens & Clark on its watch list. Retirement Administrator Patricia Wiegert said Scudder was placed on the list as a result of the recent merger of Scudder and Zurich-Kemper Investments. She added her board is quite pleased with Scudder's recent performance.
Following an asset allocation study, the $2 billion fund placed an additional $23 million with Scudder's active fixed-income portfolio and $5 million with the firm's mortgage portfolio, bringing the total with Scudder to $388 million.
Hedge fund managers couldn't compete with the returns of the S&P 500 in June or for the first half of the year, according to hedge fund experts. The Hennessee Hedge Fund Index posted a return of 2.7% in June, and is up 11.9% year-to-date, according to Hennessee Hedge Fund Advisory Group.
Another hedge fund gauge, the EACM 100 Index was up 1.3% in June, and 6.6% year to date, according to preliminary results from Evaluation Associates Capital Markets. The S&P 500 was up 4.5% in June and 20.6% in the first half. The best performing hedge fund class tracked by Hennessee for the six-month period was the Latin America category with a return of 36.6%, while short sellers lagged the most, with a return of 4.82%. AT EACM, the global/international category ranked best with a six-month return of 17.9%, while short sellers were last with a -2.3% return.
Bessemer Trust and hedge fund firm LJH Alternative Investment Advisors Inc. will form a joint venture to offer funds-of-funds.
The company will be called Fifth Avenue Alternative Investments and will allow Bessemer to expand its alternative strategy offerings.
Fifth Avenue will be registered as an investment adviser with the SEC and with the CFTC as a commodity pool operator.
Northern States Power Co., Minneapolis, hired Cadence Capital and Wellington Management for midcap growth U.S. equity portfolios. Each will get $35 million from Northern's $1.8 billion pension fund, said Rick Rohkohl, manager-dedicated funds. Funding came from dropping Investment Advisers Inc., also a midcap manager. Callan assisted.
Northwestern Memorial Hospital, Chicago, hired GMG/Seneca Capital to run a $15 million midcap growth equity portfolio. The hospital has $960 million in trust funds, said Thomas M. Satkus Jr., assistant treasurer. Funding came from a reallocation. Watson Wyatt and Northern Trust assisted.
New York Common Retirement Fund, Albany, committed $200 million to the Blackstone Capital Partners III Merchant Banking Fund, confirmed state Comptroller H. Carl McCall, sole trustee of the $80 billion system. Funding will come from cash.
Sisters of Charity Healthcare System, Houston, hired Boston Partners to manage $80 million in large-cap value equity for its operating fund. Michael Kelly, director/investments, would not identify the firm Boston Partners replaces or the size of the fund.
Asset Strategy Consulting assisted.
Orange County Employees' Retirement System, Santa Ana, Calif., selected Bankers Trust to provide master custody and securities lending services, pending contract negotiations. Boatmen's Trust had been the $3.4 billion fund's custodian. Boatmen's was acquired by NationsBank in January and in April, Bankers announced it was acquiring NationsBank's institutional trust business